Manmohan Singh, Yashwant Sinha: Raghuram Rajan’s pick of India’s ‘best’ finance ministers 

Raghuram Rajan, former Reserve Bank of India (RBI) Governor, took his pick of the “best” finance ministers the country has seen. Rajan said Dr Manmohan Singh and Yashwant Sinha were two of the best finance ministers in the country.

Speaking at the ‘Figuring Out’ podcast, hosted by YouTuber Raj Shamani, Raghuram Rajan said, “I think there is a tussle in my view between Dr Manmohan Singh and Mr Yashwant Sinha. Yashwant Sinha from the NDA and Dr Manmohan Singh, of course, from the early Congress.”

When asked why he picked Manmohan Singh and Yashwant Sinha as two of the best finance ministers, Rajan said: “Dr Manmohan Singh did the big liberalisation in the early 90s. That was a time of tremendous change. I think it took that combination of Dr Narasimha Rao (former prime minister), who facilitated the political environment and Dr Manmohan Singh who laid out the specific reforms. I think that was spectacular. And it set the pace for growth subsequently.” 

The Indian economy was liberalised in 1991 under a Congress government led by PV Narasimha Rao, who picked Dr Manmohan Singh as the finance minister. They brought in a host of changes, including the abolition of licence raj, incentivised foreign investment and technological advancement, and floated shares of public sector companies.

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Speaking about Yashwant Sinha, Rajan said, “I think Mr Yashwant Sinha, especially in the NDA second era under Mr Vajpayee (former prime minister)...there was a period when reforms had been done. The question was did we need anymore. And he kept pushing. He kept saying we are not done, we need to do more. And you know things like simplifying the tax system, he pushed for privatisation because he said we occupy too much position in the state…maybe even privatising the banks.” 

Rajan said that Yashwant Sinha put out a lot of ideas and some stuck but some faced push-backs. Sinha did not get the same kind of political support that Dr Manmohan Singh got, said Raghuram Rajan. “I thought that was a very innovative period,” said Rajan.

Yashwant Sinha served as the finance minister twice – 1990-91 under former PM Chandra Shekhar, and 1998-2002 under former PM Atal Bihari Vajpayee. Sinha is credited for bringing in many major reforms like lowering interest rates, helping fund the National Highways Authority, deregulating the petroleum industry. 

The economist also said if sheer intellect is taken into account then P Chidambaram would be on top of the list. “Mr Chidambaram is also a finance minister who has done the dream budget during the coalition government. He would be another person in consideration,” said Rajan. 

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